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There was a time when the tax avoidance game was easier to play. You could hold onto appreciated stock while eliminating risk by setting up an offsetting short position (“shorting against the box”). Congress took away that gambit. It has also made exchange funds (in which you trade in appreciated stock for shares in a diversified pool) not worth the bother. Find out how to potentially minimize capital gains tax or avoid them all together by downloading our free white paper.
How to avoid Capital Gains Tax: Capital gains tax can take a big bite out of earnings, but it doesn’t always have to
It’s no secret that the capital gains tax can hit investors hard. If the value of your stocks went up between when you bought and when you sold them, you’ll probably owe the government a chunk of your earnings. But for some Americans – in fact, far more than you probably think – there’s a way to sell your stocks and not owe the government a penny in taxes. Find out how to potentially minimize capital gains tax or avoid them all together by downloading our free white paper.
How the Average American Family Can Avoid The Capital Gains Tax Altogether This Year
Believe it or not, a household pulling in over $130,000 can still avoid the tax! As tax season winds itself to a close, many American families have had to fork over a pretty penny for selling investments. Of course, this doesn’t necessarily apply to tax-advantaged retirement accounts, but there are still a lot of families that have side money invested in the stock market for non-retirement purposes. Discover how many American families could sell their stock investments for a gain and not owe Uncle Sam a penny.
Who has to pay estate taxes? 6 Things You Probably Didn’t Know About Tax-Loss Harvesting
For decades tax-loss harvesting was an obscure tool to minimize taxes that was only available to the ultra-wealthy. Many pundits and industry professionals who were unfamiliar with its benefits thought it couldn’t add much value. Well times have changed and now many investment management firms offer a version of tax-loss harvesting.
- Tax-loss harvesting derives its benefit from the combination of tax-rate arbitrage and the compounding of your annual tax savings. Many people mistakenly believe that tax-loss harvesting provides no benefit because you must ultimately pay a tax on the gain that results from the lowered cost basis achieved through tax-loss harvesting. What they fail to realize is the tax rate you pay on the ultimate gain is almost always lower than the rate at which you can benefit from your harvested loss. That’s because your loss creates value at the short-term capital loss rate and the ultimate gain is taxed at the much lower long-term capital gains rate.
- Tax-loss harvesting is only appropriate for long-term investors. There is no benefit to tax-loss harvesting if you plan on holding your portfolio for less than one year because you cannot benefit from the aforementioned tax rate arbitrage or compounding. The annual value of tax-loss harvesting increases as your investment horizon increases because your savings continues to compound throughout. As such, tax-loss harvesting is likely more valuable to millennials who have the opportunity to save and invest for many more years than baby boomers who are close to retirement.
- Your benefit from tax-loss harvesting will likely increase if tax rates are raised. Again, because of tax rate arbitrage, an increase in rates at least a year before you withdraw your money from your tax-loss harvesting account will actually increase your benefit. If long-term capital gains rates increase by more than ordinary income rates (which seldom happens) then the benefit of tax-loss harvesting will decrease, but will still be substantial. The only circumstance that could significantly impact your tax-loss harvesting benefit is if rates increased in the specific year in which you planned on withdrawing all your funds.
- One wash sale does not eliminate the benefits of your overall harvested losses. The wash sale rule governs whether realized losses may be used to offset ordinary income and realized capital gains. It states that you may not offset your taxes with a recognized loss if it results from the sale of a security that is replaced with a substantially identical security 30 days before or after the sale. ETF-based tax-loss harvesting services avoid the wash sale rule by replacing an ETF that trades at a loss with another ETF that is highly correlated, but tracks a different index. The IRS does not consider ETFs that track different index’s to be substantially identical.
- You get more benefit from tax-loss harvesting the more frequently you add deposits to your account. Advisors not familiar with tax-loss harvesting tend to view it through their primary experience, which is with older investors who are in the wealth preservation stage of their lives. As a result these investors tend to make only one deposit when they open a new investment account. In contrast, young investors are in the wealth accumulation phase of their careers so they tend to consistently add to their investment accounts over time. The greater the number of deposits, the greater the number of tax lots with which tax-loss harvesting can work, which translates to more total annual benefit.
- Tax-loss harvesting can work well even after you retire. Once again, the longer you allow your money to compound, the greater the benefit from tax-loss harvesting. It is highly unlikely that you would withdraw all your retirement savings on the date you retire. Rather you are likely to withdraw a relatively small percentage of your retirement account each year. The slower the rate at which you withdraw, the higher the annual compounded benefit from tax-loss harvesting, even accounting for the taxes due upon withdrawal.
The Bottom Line: Tax-Loss Harvesting Works When Implemented Strategically
In summary, tax-loss harvesting is a way investors can take an active role in managing their portfolios with a strategy that is based on opportunity created by tax law, not market speculation. In some cases, after-tax returns could be greatly enhanced, putting the investor well on the road to quicker asset accumulation, so that next time the market turns downward you won’t be feeling blue.
Why Work with Werba Rubin Papier: Experience, Transparency, Trust
We are fee-only, fiduciary, financial planners and we do not sell commissionable products or accept referral fees. Financial Planning is more than investing, its about identifying what you want in life, and then building the financial architecture, investment and tax strategies to make it all happen. We do this in a personalized approach, with no product selling. Whether in your prime career, nearing retirement or already in retirement, we are happy to discuss how a comprehensive planning, investing and tax relationship can benefit you.
Alan Werba, CPA, CFP®
Managing Member
Aaron Rubin, JD, CPA, CFP®
Senior Wealth Manager
Jason Papier
Managing Member
Alan Werba, CPA, CFP®
Managing Member
Whether as an Advisor, philanthropist or corporate executive, Alan Werba has always believed in the power of careful planning to help make financial goals a reality.
Alan received a BS degree in Business Management from the McIntire School of Commerce at the University of Virginia in 1970 and later attended Loyola College in Baltimore, Maryland for accounting classes. He was licensed as a certified public accountant (CPA) in 1974 and earned his certified financial planner (CFP®) credential in 1985. Alan is also a licensed real estate broker in addition to holding insurance licenses for life, disability, long-term care and various property & casualty policies.
Alan Werba co-authored a book entitled “The Prudent Investor’s Guide to Beating the Market” that was published by Irwin Publishing in 1985. This book represents the investment philosophy that is still used in the firm’s investment advisory work today.
A big believer in giving back to his community, Alan has been actively involved in a wide variety of philanthropies and non-profits. After serving as its Treasurer, he was President of Big Brothers of Santa Clara County when it merged with Big Sisters. Alan served as the Endowment Chair for the Jewish Federation of Silicon Valley as well as the Financial Vice-President for Congregation Beth David. Currently he is the Fundraising and Development Vice President for Hillel of Silicon Valley and has served on Hillel’s Board since 2003. Alan is a long time financial contributor to the San Jose Repertory Theater along with many other “pet” projects in the San Jose area.
In his free time, Alan is passionate about golfing. Alan and his wife Pat live in San Jose where they enjoy getting together with their two daughters (Libby and Jenny).
Aaron Rubin, JD, CPA, CFP®
Senior Wealth Manager
Aaron Rubin brings a wealth of diverse financial experiences. He believes that a comprehensive wealth plan should both grow and defend assets.
He received his BA degree in Economics-Accounting-Spanish from Claremont McKenna College. He received a law degree from the University of Illinois College of Law, and was admitted as a member of the California Bar in 2006. He is licensed as a certified public accountant, and has also obtained licensing as a life, health and property and casualty insurance agent in the state of California. Aaron also received his CFP® designation.
Prior to joining Werba Rubin Wealth Management Aaron worked at Deloitte (an international CPA firm), at Abbott Stringham & Lynch (a local CPA firm) and at Farmers Insurance.
He and his wife Libby live in San Jose with their two daughters Natalie and Gwen. Not to mention their English bulldog, Daphne.
Jason Papier
Managing Member
Prior to joining WRP Jason was the President of Fluent Wealth Partners. He works exclusively as a fee-only RIA, receiving no commissions on any investment or other products so that he may act as a fiduciary. Prior to Fluent, Jason was a financial planner and partner at PWJohnson Wealth Management, another fee-only RIA.
In 2005, Jason created and began hosting Pro Money Talk. At the time Pro Money Talk was the largest financial podcast on iTunes with listeners in over 40 countries. Guests on the show included Steve Forbes and Nobel Prize winning economist Bill Sharpe, among others.
Jason is a frequent commentator. He has provided analysis to The Wall Street Journal, Consumer Reports, Worth Magazine, American Medical News, Consumer Digest and many other industry and consumer publications.
Jason has served on many local charity boards and committees and currently is the President of the San Jose Library Foundation.
Lucy Lam
Operations Manager
Marlene Bass
Executive Admin Assistant
John Pfahnl, Jr., CPA
Investment Advisor Representative
John Pfahnl, Jr. was born in California on April 23, 1950. He received his BS degree in Accounting from San Jose State University in 1977. In 1982 John secured his CPA license. He also has held a Series 7 license and a Series 65 license since 1999.
John has been a principal of Pfahnl & Hunt Accountancy Corporation (a San Jose, California based CPA firm) since July 1981. Pfahnl & Hunt continues to be John’s primary business activity. John became a registered representative of Loring Ward Securities, Inc. in June 1999. He also became an Investment Adviser Representative (IAR) of LWI Financial, Inc. at that time. In December 2006 John became a dual-registered IAR when he was also registered with WDAS.
During John’s career, he has NOT been the subject of any disciplinary actions from any of the regulatory bodies responsible for policing his professional activities. He has also NOT been the subject of any criminal or civil court actions. He has NOT been the subject of any administrative proceedings before the SEC or any other regulatory bodies. He has NOT been found to be in violation of any self-regulatory organization’s (SRO’s) rules NOR has he ever been barred or suspended from membership in any professional organizations.
As stated above, John’s major Outside Business Activity is his employment with Pfahnl & Hunt Accountancy Corporation where he performs both tax and accounting services for a diverse clientele. Although he is registered as an IAR with WRWM, his primary business activity is the CPA functions he performs for Pfahnl & Hunt Accountancy Corp. John has no other Outside Business Activities.
John is registered as an Investment Adviser Representative (IAR) with Werba Rubin Wealth Management, LLC. In this capacity John’s work is supervised by Alan Werba, Chief Compliance Officer for WRWM. Alan’s telephone number is (408) 260-3109. Alan reviews and approves all of John’s investment related correspondence, advertising materials, etc. As of January 1, 2010 John’s Series 7 license was placed on inactive status since his investment related work for the past year has been solely in the advisory area and does not require an active Series 7 license.
Pamela Hedblad, CPA
Investment Advisor Representative
Pamela Hedblad was born in Minnesota on August 27, 1956. She received her BS degree in Accounting from San Jose State University in 1978. In 1982 Pam obtained her CPA license. She also holds a Series 7 license and a Series 65 license.
Pam has been a partner of Abbott, Stringham & Lynch (a San Jose, CA based CPA firm) since her former CPA firm (Pascuzzi, Hedblad & Co) merged with Abbott, Stringham & Lynch in November 2004. Pam’s employment with Abbott, Stringham & Lynch continues to be her primary business activity. Pam was initially licensed as an Investment Adviser Representative (IAR) of LWI Financial, Inc in January 2003 and became dual registered when she was added as an IAR for WDAS in December 2006.
During Pam’s career, she has NOT been the subject of any disciplinary actions from any of the regulatory bodies responsible for policing his professional activities. She has also NOT been the subject of any criminal or civil court actions. She has NOT been the subject of any administrative proceedings before the SEC or any other regulatory bodies. She has NOT been found to be in violation of any self-regulatory organization’s (SRO’s) rules NOR has she ever been barred or suspended from membership in any professional organizations.
As stated above, Pam’s major Outside Business Activity is her employment with Abbott, Stringham & Lynch where she performs both tax and accounting services for a diverse clientele. Although she is registered as an IAR with WRWM, her primary business activity is the CPA functions she performs for Abbott, Stringham & Lynch. In addition, Pam holds a real estate salesperson’s license and she originates mortgages through Wymac Capital, Inc. for which she receives a portion of the loan origination fees.
Pam is registered as an Investment Adviser Representative (IAR) with Werba Rubin Wealth Management, LLC. In this capacity Pam’s work is supervised by Alan Werba, Chief Compliance Officer for WRWM. Alan’s telephone number is (408) 260-3109. Alan reviews and approves all of Pam’s investment related correspondence, advertising materials, etc. As of January 1, 2010 Pam’s Series 7 license was placed on inactive status since her investment related work for the past year has been solely in the advisory area and does not require an active Series 7 license.
Marlene Bass
Executive Admin Assistant
Marlene Bass has been an integral member of Werba Ruben and Loring Ward for over 25 years. During these years she has served in many roles and she is well known to most Werba Ruben clients. Marlene assists advisors to set up new client accounts, and she is intimately involved in the ongoing administration of our clients’ accounts. Aside from her expertise at client management, she is also a notary public.
Marlene enjoys spending time with her husband Lloyd, and her children (Danielle and Tyler).
Lucy Lam
Operations Manager
Lucy has over 20 years of experience working with high net worth individuals and families. Lucy worked as Operations Manager for fee-only RIAs for the past 12 years at Fluent Wealth Partners and PWJ Wealth Management. Prior to this, Lucy worked at Comerica Bank’s Private Banking and Wealth Management division.
Helping clients meet their financial goals and objectives for over 30+ Years!
The Fiduciary Standard
The world of investment advice is plagued with conflicts of interest, obscure disclosure and an overall lack of transparency. Seeking out an investment adviser who will act as your fiduciary can help to eliminate many of the problems associated with commission-oriented, product focused salespeople.
Because a fiduciary is required, by law, to give full disclosure of how they are paid as well as any conflicts of interest they may have, before you do business with them, you as the consumer are in a better position to make an informed decision. To help you understand our commitment and responsibility to our clients, click play and watch our broker vs. fiduciary video now.